CHAIR (Mr Van Manen): Thank you, everybody, for coming along today. It is terrific to have you here. As we were discussing before, Commissioner, it has been eight months or so, with the effluxion of time with elections et cetera. Thank you and the rest of your team for taking the time to come today.

I declare open this public hearing of the Parliamentary Joint Committee on Law Enforcement. The committee is hearing evidence in support of its examination of the Australian Federal Police 2012-13 annual report. This is a public hearing and a Hansard transcript of the proceedings will be made available.

Before the committee starts taking evidence I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to the committee. The committee generally prefers evidence to be given in public, but, under the Senate resolutions, witnesses have the right to request to be heard in private session.

If a witness objects to answering a question, the witness should state the ground upon which the objection is taken, and the committee will determine whether it will insist on an answer having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such requests may, of course, also be made at any other time.

I remind committee members that the Senate has resolved that an officer of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanation of policies or factual questions about when and how policies were adopted. Officers are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by minister and should be accompanied by a statement setting out the basis of the claim.

I now welcome Commissioner Negus and other representatives of the Australian Federal Police. Commissioner Negus, I invite you to make a brief opening statement. Then the committee will ask some questions.

Mr Negus: Thank you, Chair. I do have an opening statement. Thank you, members and senators, for the opportunity to be with you this evening.

The 2012-13 reporting year was again a challenging yet highly successful period for the Australian Federal Police in both enforcing the Commonwealth law and combating organised crime and terrorism. Throughout the 2012-13 financial year the AFP made it a priority to reinvigorate our investigative capability, optimise the use of our resources, enhance the flexibility of our workforce and strengthen our relationships with partner agencies and stakeholders. As a result of this focus, the AFP built on the previous year's effort and delivered what we consider to be outstanding results for the reporting period.

I am proud to say that, for the second consecutive year, the AFP met or exceeded all 33 key performance indicators listed in the portfolio budget statement—and, as I mentioned before the hearing, we are on track to do it again this year with a few of those results yet to come in. In addition, the AFP improved on the results of 11 of these indicators, including: community confidence in aviation law enforcement and security; and community awareness of cybersecurity. The AFP also recorded an overall stakeholder satisfaction rate of 90 per cent, which equals last year's record result.

Some of the AFP's key operational achievements include: the seizure of 6.5 tonnes of illicit drugs and precursors, mitigating an estimated $2.4 billion in harm to the Australian community; the restraint of $62.5 million in assets, which was 59 per cent above the target; and achieving an organisational conviction rate of 93 per cent for cases that reached court.

The multiagency cooperative approach of the AFP has resulted in significant domestic and international outcomes during the reporting period. These are included in the report. Among them, for example, is Operation Marca, which is a joint task force comprising the Australian Federal Police, the Australian Commission for Law Enforcement Integrity—ACLEI, as it is known—and Australian Customs. It targeted corrupt activity and organised crime within Customs at Sydney's international airport. During the reporting period, the operation resulted in the arrest of 20 people, including four serving Customs officers, for their alleged involvement in the importation of border controlled precursors and also corruption offences. In addition, the operation resulted in the execution of 28 search warrants and the seizure of 54 kilograms of pseudoephedrine and over $235,000 in cash.

Operation Roselle was also a significant drug investigation which involved 585 kilograms of methamphetamine—or ice, as it is commonly known—worth up to $438 million being seized. This is the largest single seizure of ice in Australian history and resulted in the arrest of three people.

In addition to those results, the AFP's high-tech crime operations portfolio, along with its international partners, has also achieved notable outcomes. This included Operation Conqueror, which was a large-scale coordinated child sexual abuse investigation resulting in 25 arrests here in Australia.

In such a dynamic environment, sound governance and a focus on reducing our supplier expenditure also ensured these results were delivered on target, with a small deficit of $2.5 million on a budget of over $1.3 billion. That is a variance of less than 0.2 per cent on our total budget. The significance of these results is further emphasised by the absence of any adverse findings from the Australian National Audit Office in relation to the AFP's financial statements. For an agency our size, of almost 7,000 people, that is an outstanding result—with no A, B or C category findings at all.

It is important to note that the AFP's successes not only come from our officers and investigators working on the front line but are also underpinned by what we call a unified workforce. That workforce includes the members that make up our close operation support areas and our support functions, all working together. Our inclusiveness was also recognised through a 2013 Pride in Diversity award, where the AFP was found to be the highest placed public sector employer in supporting gay, lesbian, bisexual, transgender and intersex members. The AFP is proud of the results shown in the 2012-13 annual report, which we have tended. I and my team are happy to take any questions that you may have with regard to that.

CHAIR: Thank you and, again, congratulations to you and the team for your efforts over 2012-13. You are to be congratulated for those achievements. You touched on a couple of operational matters, but I am particularly interested in operations Polaris and Trident in Sydney and Melbourne with respect to waterfront task forces. Would you like to speak to those.

Mr Negus: Yes, certainly, and I will pass to the deputy commissioner of operations shortly. We started Operation Polaris as a bit of a test to see whether or not we could structure a joint investigation with the New South Wales police, the New South Wales Crime Commission, the Australian Crime Commission and Customs to look at vulnerabilities in the waterfront. We really changed our focus a couple of years ago from looking at particular people to looking at identifying vulnerabilities and closing holes, if you like, in our border security regime for the importation of weapons, narcotics or whatever it might be. What Polaris has successfully done in getting behind the veil, if you like, of the waterfront in Sydney is look to identify those areas of vulnerability and close them, so there has been a lot of procedural work done by Customs to look at where things can go awry, and they have fixed them over that period of time.

The Marca job, which I talked about, looked at corrupt Customs officers. It identified a lot of vulnerabilities in that regard. Again, Customs has worked very hard since that period of time to close those loopholes, if you like, or those vulnerabilities in that regard. It has been so successful that the Victorian police and Queensland police have wanted to jump on board, with the support of their governments. We have opened similar task forces in Victoria and Queensland over that period of time. Victoria has had a little time to settle now and has been very successful. Queensland is really only just starting to get up and running in any great spirit, but, again, all the signs are there that the vulnerabilities we identified in Sydney are not limited to Sydney. We never thought they would be, but the proof is in the pudding, I guess, in that they have identified and seized multiple tonnes of drugs and, I think, over 250 tonnes of tobacco that evades excise coming in. Those sorts of things are things you do not read about in the papers every day but are significant organised criminal activity. The operations have been looking mainly at the vulnerabilities aspect and trying to harden our systems and target hard in Australia against external infiltration from organised criminals.

Senator PARRY: Have the Victorian authorities named it Operation Collins? Are you sticking with the submarine theme?

Mr Negus: And it is Jericho in Brisbane; we thought we would avoid Collins. Mr Phelan, would you like to add something?

Mr Phelan: Not too much more, Commissioner—only to say that, obviously, Polaris commenced in July 2010, with the agencies that the commissioner mentioned. Polaris, Trident and Jericho are models where, because everybody is together, there is a multipronged attack and it gives you multi opportunities to disrupt serious and organised crime. We have worked very closely with those, looking at the vulnerabilities, as the commissioner said—what exists along the supply chain, all the way from overseas through to the Australian ports. Having multiple agencies gives you multiple opportunities to do different things.

For example, a proper course may well be that we use the Victoria Police's powers and so on to do things down there, because it intersects with a trafficking unit or indeed with outlaw motorcycle gangs—it can work very closely with their Taskforce Echo in relation to gangs material. Likewise, it may well be that there is only enough evidence to go on taxation matters, in which case we will work very closely with the Taxation Office to get a result.

One point that is lost on a lot of people is the issue of working with tobacco. The commissioner mentioned 250-odd tonnes. That is revenue lost in excess of $170 million to the Commonwealth. So it is one of those things that we do place a high priority on—also, organised crime is organised crime: the commodity means nothing to them. So when we target organised crime, we are after organised crime, not necessarily the commodity—because they do poly-commodities.

Mr Negus: It is one of the things we have seen changing—and we have talked about this in estimates with Senator Parry before—in that organised crime is really diversifying into multiple areas, into anything that will make them money. Traditionally, particular ethnic groups would traffic in particular drug types. We are now looking at multiple ethnicities, if you like, coming together to look at multi-shipments. They will diversify into tobacco or other commodities, whether under state or federal jurisdiction, just so they can make money. So there is no such thing as a specialist anymore, if you like—they are all multipronged and multifaceted in looking at what they do and how they make their money. So it is important that all those agencies come together to collectively address that larger problem.

CHAIR: How much of your role in these operations is coordination as against providing manpower on the ground?

Mr Negus: The states and territories provide an equal share, if not more, of manpower. We are the second-biggest contributor in Sydney. I think the New South Wales Police have around 35 or so and we have around 25, from memory. But, in saying that, we also supply the international dimension of this—that is, our liaison network around the world. We have nearly 100 officers overseas in 28 countries. We work with our partners overseas to look at that end of the supply chain and those sorts of things as well. Again, the state police bring everything from their traffic law enforcement agencies to other components of what they do day-to-day—and Customs as well, with their specialties and extensive powers under the Customs Act—to look at all of the elements of particular things. We also work with the New South Wales Crime Commission and the Australian Crime Commission, with their coercive powers and other hearings that they can run, with regard to eliciting as much information as we can to get the intelligence right.

So that multipronged attack that we talk about has proved most effective and it is something we unashamedly push into whenever we can. It has worked in counter-terrorism, it has worked in organised crime and we are looking at different models now for other crime types—even, for instance, high-tech crime in the child sexual abuse cases—to look at that multipronged approach to get the best outcome.

Senator PARRY: Can I just follow on from the success with the joint operations. How complex are the memoranda of understanding in relation to setting up with state jurisdictions and the federal jurisdiction? Who does them, have you developed some expertise with them and are they readily accepted?

Mr Negus: Like most MOUs they are actually only documents of spirit, cooperation and intent. A lot of it comes down to the trust that is built up on the ground. There are joint management committees that sit over these agencies. Again, Andrew Scipione and I, and John Lawler, when he was here, and Mike Pezzullo would sit down and look at these investigations and would be briefed by those teams regularly on what is happening and why and how and what more we need to bring to the table.

I have to say that, in the almost-five years I have been in this job, I have never seen better cooperation between state and federal agencies—and the federal agencies themselves working much better together—for a common purpose here. They are great examples of what you can achieve.

Funding is always an issue, I have to say—not surprisingly! Again, there were some creative models prepared with regards to the Polaris task force, where proceeds of crime funds were used to fund the state and territory activities to start with, on the proviso that any proceeds of crime would be returned to the Commonwealth. So it was sort of seed funding, if you like, to be returned to the Commonwealth as part of the process.

Senator PARRY: That was a segue into the reason I was asking about the contracts. The financial arrangements, where there are proceeds of crime or any confiscated wealth: how do you come to a conclusion with those, and do you have an arguments about that? Or is it fairly smooth sailing?

Mr Negus: From the very start of this it was agreed that because the Commonwealth would fund the state's involvement in this process, then the first component to repay that element would be returned to the Commonwealth. So that was understood from the very start; for anything above that we would look at appropriate sharing arrangements from that point forward.

Senator PARRY: And no hassles? Every state jurisdiction, the signing of the MOUs—it is all working smoothly?

Mr Negus: It has all been very smooth. Again, everyone understands that this is a shared responsibility in the ports. In airports the Commonwealth has taken the lead role, and quite rightly so, but the ports are very much a shared jurisdictional responsibility. We would like to see that not only for the benefits it brings in the operational sense but also just for the common ownership of those resources and responsibilities at that port environment.

Senator PARRY: And my old bugbear: unexplained wealth at the federal level. Are we there now? Do you think we are just about there?

Mr Negus: We are seeing some very encouraging signs from the states and territories about recognising the jurisdictional limitations that the Commonwealth has here, and the constitutional limitations as well. I think there is a report, which is either with the Minister for Justice or very close to being with him. It is by Mick Palmer and Ken Moroney, who went around and spoke to all the jurisdictions and looked at their concerns. A lot of it does rest on the states' and territories' confidence that they will get an appropriate share of this type of money. Again, from our perspective, we are more than happy to foster that and to look at appropriate sharing based on resource inputs and other things that should go to states and territories as well. There are no sacred cows as far as we are concerned; we just want a model that will work, and is fair and equitable to everyone who is putting in.

Senator PARRY: In relation to outlaw motorcycle gangs and the toughening of legislation in some jurisdictions, for example Queensland. There are rumours in Tasmania and other jurisdictions that gangs are relocating, or certainly buying real estate. Is that an issue? do we need to push strongly for the harmonisation legislation?

Mr Negus: I have been talking to the Federal Police Commissioner, who would expect me to say 'yes', that common laws across the country would make it a lot easier for all of us.

Mr Negus: In saying that, I understand that there are political sensitivities in each of these environments. Apart from that, we work very closely with all of them. Of course, the national anti-gang squad has been up and implemented. We have people around the country now who are working, and embedded in many cases, with their state and territory colleagues, working on the transfer of intelligence and the sharing of information.

I think that the last report I read—and Mike might correct me—was that over 180 requests have been made of the AFP in the last few months for intelligence and support from our national anti-gang squad. That is an enormous request rate; it exceeded our expectations. But the states and territories have quite willingly jumped on board here and recognised that international reach that we have with our liaison officers, particularly through South East Asia and through Europe. They are collecting, doing inquiries and getting information and intelligence in regards that can help the states and territories in their day-to-day operational duties. Again, we are very much looking at supporting the good work they do. New South Wales has literally hundreds of people working on this; we have half a dozen who we can support and add in that regard from the national anti-gang squad in Sydney. The elements they bring are worth their weight in gold, because they actually do bring a very different dimension to support those teams.

Senator PARRY: The reports some of us are getting are very encouraging about the anti-gang stuff. It is good.

Mr Negus: A national model and a national picture is required, because these are national entities. The motorcycle gangs, whilst they may exist in chapters, are networked around the country and around the world. As I said, they are particularly pushing into South-East Asia, where you only have to go to places like Pattaya in Thailand to see Australian motorcycles gangs setting up in bars and places like that. There is a real benefit in looking at the international picture here, not just what is happening on the Gold Coast versus what is happening in Sydney.

Senator PARRY: It is a great record you mentioned, and you are on target about this year, and you mentioned that you had a 93 per cent conviction rate of cases placed before the courts. How many cases are you placing before the courts out of charges? How many go to prosecution?

Mr Negus: I think we could get that figure—

Senator PARRY: I am just trying to put a dent in your really good record!

Mr Negus: That figure needs to be explained: that means the case goes to court and has a conviction in it. So it is not everyone who was charged in that case, but that is the standard formula that has been used forever and we have not changed that formula.

Mr Negus: It is very high, and it has remained in the nineties for the last half a dozen years. The number of finalised cases reaching court actually increased last year by—I am not sure I have that figure, Andrew—

Senator PARRY: I am happy for you to come back to me at the end of the session.

Mrs ELLIOT: Can I start by congratulating the AFP and everyone present today. Thanks for coming. I commend you on the remarkable work you do. I have a general question in terms of intelligence gathering. Obviously I am not asking for an insight into any operational matters, but I am particularly interested in the challenges that are posed by the growing online world. That must be something that poses difficulties, because that is an arena that is changing all the time, and of course the criminal element are using that in every forum that they can. That must be something that you are having to always monitor and watch in terms of intelligence gathering too, because that would be a forum they would be using across the board. There seem to be so many advances all the time with internet capabilities, so I assume that is a challenge you face.

Mr Negus: Absolutely. It is one of our key areas of concern—and not only that but even things like the radicalisation of people online, where people are sitting at home in their lounge room online and watching radical preaching from another part of the world which we do not have any visibility on. They are the sorts of things, again, from a collection point of view, in the counter-terrorism space. I might get Kevin to talk about this. Kevin's normal job is as the head of our intelligence area, and he was a former head of our high-tech crime area, so he is well placed to answer about some of those developments.

Mr Zuccato: Senator, you are right: the increase in availability of communication technology does pose some challenges—and I will concentrate on communications for the time being—but it also provides for some real opportunities in terms of the ability for law enforcement to infiltrate certain networks and rely on more traditional investigative techniques that therefore do not require us to collect that amount of data. The big data that we hear thrown around quite often does present challenges for law enforcement, and it is very difficult to wade through the amount of data that is collected and to locate the information that is actually required for an investigation. For me, that simply means that we need to change our investigative approach and retrain our investigators not to ask for everything and to search for those opportunities that exist that are going to pay the biggest dividend. It also provides us with an opportunity to examine the way in which the internet and technology are affecting society and the way in which the criminal enterprises that affect this country operate and how we then mitigate that risk. In doing that, we look really closely at changing paradigms in terms of behaviour, language and psychology and develop initiatives whereby we actually infiltrate as opposed to collect. So there are a range of different areas in which we are concerned. It means that we need to modify our approach based on the fact that there is increasing technology, there is increasing data, and we need to change up our methodologies in order to do just that. In doing that, partnerships are critical. We signed a memorandum of understanding with Telstra not long ago looking at cooperation and further collaboration with the private sector to help us to overcome some of these challenges.

Mr Negus: It is a good point. If I could just cut in there, Kevin, only about a week ago David Thodey, the CEO of Telstra, and I signed an MOU where they have agreed to come in and talk to us about the advances in technology and give us a head start, if you like, on getting ahead of the curve on communications technology and what it is, and, in kind, we have agreed to talk to them about the sorts of trends we see in crime and how they can harden their own systems to infiltration, particularly in the area of child exploitation and those sorts of areas. Telstra been very good corporate citizens in that way, in looking to make their products safe for use online by parents and children and other things. It is a win-win relationship, if you like, where they give us the heads-up on what is happening in the technological space and we can try and prepare for that, and we can provide them with advice on vulnerabilities they may have in their own systems that could be exploited by criminals.

Just to take the last step on that, as things like access to data and technology are changing and we move more into packets of information rather than copper lines and those sorts of things, our ability to collect intelligence and information through telephone intercepts is being eroded every other day. We know what Skype is like and we know what a whole range of other things are like. They are just new forms of communication that could not have been thought of in 1979 when the T(IA) Act was written. We have been appearing before committees and looking at a whole range of things, working with Attorney-General's Department, to try and make sure that we modernise as best we can the approaches and that we do not keep falling further behind technological advances. The evidence we see of criminals is that they are very quick to pick up these new technologies. One, they have got the money, usually, and, secondly, this is all about risk for them, and, if they can lessen their risk of being apprehended, they are prepared to invest in these things and use technologies. You can buy encryption and those sorts of things off the shelf now, from Dick Smith or wherever. Phones come standard with the ability to encrypt in a lot of ways now, so it makes it much more difficult for us to do these things in targeting organised criminals.

CHAIR: In that respect, if I can just jump in, how are you going from the AFP's perspective in maintaining your technology systems to be able to continue to pursue and keep pace with that technological change?

Mr Negus: It is a difficult question, because each of these upgrades costs many tens of millions of dollars. You have to try to position yourself in the market where you are investing in something that is almost technology neutral and can help you step forward. So you do not invest in the latest trend; it is about trying to look forward to what the system should be. We are upgrading our own internal computer systems again to receive things like data and video images and those sorts of things in real time. We have just signed contracts with providers, and the price is—Andrew will tell me.

Mr Wood: It is $130-odd million.

Mr Negus: It is a $130-odd million investment over the next four years to completely upgrade our internal systems. As Kevin mentioned too, it is also working with partners. We realise that not every agency in the country can do this on their own. We leverage very heavily off places like the FBI and the DEA, who have scales of magnitude that we can only imagine. We have a secure pipe, for instance, between our high-tech crime area and the FBI, so if we have large amounts of data we can send that securely to the United States and have that analysed for us and sent back. These are cooperative relationships. The technology research and development we do here we share with the FBI, and they have implemented a couple of systems based on the technology our guys have invented. All of these things we are trying to leverage off with trusted partners both domestically and internationally to try to keep pace with what is there. It is an expensive game and you have to be very judicious about how heavily you invest in one technology or another in this context, and we have tried to be very careful about that.

Mr Wood: The forensic facility is a good example too. We are investing at the moment in a new forensic facility out at Majura to make sure that that side of the support work to the investigators is also cutting edge in terms of technology and in terms of an understanding of world's best practice in terms of the application of science and technology.

CHAIR: Not quite at the CSI level yet, where you can do it in—

Mr Wood: No; real technology!

Mr Negus: I have got to say, though—and I hope you can all come to the opening next year—most people will walk in there and think, 'This is pretty CSI like.' It does not cost as much as CSI, but it will put us at an appropriate cutting-edge for the next 20 years, we think, and suit not only the AFP but all Australian law enforcement and regional law enforcement, who send us quite regularly DNA samples that they just do not have the capability to do through the Pacific or South-East Asia. We support our partners in that regard and do things for them and then provide experts to give evidence in court and those sorts of thing.

CHAIR: Do you get remunerated for that work?

Mr Negus: Some we do, but much of it we provide on a capability-building endeavour, so we have systems and processes in place where we have officers out there in the Pacific working, and that will be part of that program, so we will bill it to that program. Through DFAT, we are developing aid packages to build capability. So a lot of it gets billed to that process. The size of those countries just does not facilitate that sort of technology being available for them.

Mr MATHESON: Commissioner, congratulations on your key achievements over the past year. There are some great results here in the context of the report. This committee has previously had an inquiry in relation to port and airport security. One of the issues that was raised was security identification cards and the issue of them and how 30,000 of them had gone missing from airports and ports. Would you like to make a comment? You have talked about your vulnerabilities and external implications in relation to organised crime. Do you think there should be a better system in place in relation to port security and airport security cards that are issued?

Mr Negus: It is almost self-evident that, if those cards go missing, then that is a vulnerability and a security issue. I know that there have been some significant improvements in where we have identified those vulnerabilities, in our work in Polaris, for instance, and in the airport environment. We have made recommendations to agencies and others to try and close those loops. Did you want to add anything, Peter? Peter is in charge of our airport security environment as well.

Mr Drennan: There certainly have been some significant developments in that area. You are right: there was a significant vulnerability, but having recognised that, and since we have had a very heavy presence at airports for some time and now also on the waterfront—but also with Customs and Border Protection and Immigration all recognising that those are issues—we have tightened up significantly. We rely a lot more on the information that we hold to be able to have some basis to actually look at who has got those cards—and, where there are people who should not have them, then there is certainly something done to remedy that.

I agree there were vulnerabilities there but a lot of those have been closed down. Will we ever be able to put our hands on our hearts and say there is no one there who should not have one? I do not think so because when you look at Sydney airport, something like 30,000 people work in the aviation stream force in the airport alone so there are a large numbers of people who do have those cards.

Mr MATHESON: At the ports in Adelaide, there were no security on the gates. We drove straight through the gate in a minibus and walked around. You just have to turn up with the prime mover, put a container on the back of a truck and drive it out. At the joint task force Polaris and Trident there seemed to be a fear from local authorities to even go over. It seemed like a real vulnerability in South Australia. It was a real issue. Local state police were too scared to actually go down to the ports.

Mr Drennan: We do have the responsibility for policing airports. The vulnerabilities at airports are in regards to terrorism and attacks of that nature so security is far more robust and far more stringent than at the ports. You need to remember with the ports there is a far larger number of them in remote places and they are not Commonwealth responsibilities either. They are state responsibilities. There is an issue of jurisdiction there as well.

Mr Negus: It is a good point you make. We have been concerned about the ports for some time. Polaris, Trident and Jericho are proving the point, if you like, that there is significant criminality. But the lessons are being learned and are being conveyed to those other locations. If you look at New South Wales alone, you have got Newcastle and Wollongong either side of Sydney, which, again, could create vulnerabilities where the local police are responsible. As well as going to the local burglaries, domestics and other things, they have to try and cover off on those environments as well. It is a difficult job for them.

Senator Parry, I will come back to the question you asked. It is on page 12 of the annual report. It says 490 cases were finalised reaching court, which represented a 38 per cent increase on the previous year. I remembered it was a significant increase on the previous year. It was just under 500 cases that got to court for those conviction rates.

Senator EDWARDS: I join with my colleagues in congratulating you on the last 12 months. I am from South Australia. Given that 12 months ago you were probably sitting here doing this, has anything happened that has—not blindsided you because nothing ever does because nothing ever surprises you in your business—diverted resources which you did not expect to have resources diverted to and it is becoming an issue you from a budget or resourcing point of view? I am thinking about the ice epidemic in Mildura, which I have just started over the last six months to hear about and which two years ago was not an issue. Is there anything like that causing a great deal of concern?

Mr Negus: For the Hansard, we are regularly surprised but usually we try to be prepared for surprises as well and respond as best we can. We are in the intelligence game so we try and front run a lot of these things as well. I guess I could go back a few years and say that obviously the people-smuggling issues really did have us running around, committing a lot of resources for a lot of time with not a lot of result in the context of crew prosecutions and other things. Obviously in the last few years that has wound back. We still have a range of resources doing prisoner transfers and those sorts of things or immigration transfers but we fully recover that money from the department of immigration for what they do.

Certainly drugs is something we have been doing for a long time in the AFP in the investigation of narcotics. The quantities change and the types change. We have seen cocaine increase as well as ice. As I said earlier on, the largest single ice seizure in Australian history, 585 kilos, was during this year. That is an enormous amount of drugs when you think they sell it in gram lots. Over half a tonne is a lot of drugs. Those sorts of things we continue to go with. Peter's area runs counter terrorism. The conflict in Syria, and our requirement to work with ASIO very closely in the investigation of people who are travelling to Syria and potentially can be radicalised or further radicalised and come back better armed and with experience and methodologies that could be used in this country, has caused us to devote a lot of resources, with ASIO, to looking and monitoring. We made some arrests before Christmas in regard to people who were facilitating people travelling to Syria to fight. So those are the sorts of things that are on the radar and that you will see very other day.

There are things like foreign bribery. There has been a lot of talk, even at estimates the other night, about the OECD report. They have been quite critical of Australia's response to this, but again they are difficult investigations where most of the evidence is overseas, in countries that do not have the same legal systems, structures or profiles that we might put to some of these things. Mutual legal assistance is a very lengthy process to get evidence that is admissible in Australian courts. We currently have, I think from memory, 13 of those investigations on foot. We have about 60 people working on foreign bribery alone where Australian companies are alleged to have made facilitation payments or other types of payments which would be contrary to the Crimes Act. So that is probably the growth area that is taking a lot of our attention, because we do get international criticism. It is not just about what Australia thinks of this; OECD reports list Australia. There has been a quite public one involving Securency and the Reserve Bank which has been going on for some time now, in which we have prosecuted people and people have been convicted and pleaded guilty. The rest of these are very much works in progress, and sometimes they can take years to come to fruition. So again a lot of resources go into this and they are very complex matters where we deal with ASIC.

Senator PARRY: But we also have a higher burden of evidence collection and a standard of evidence, don't we? That is why we are more criticised, but I think I would much rather have the system we have and cop that criticism.

Mr Negus: There are checks and balances in place in our systems that do not exist in others. I guess it is a little naive to think that one size fits all in this case, and I can assure the committee, as I have assured the Senate in other areas, that we take this very seriously. We have done a lot of work with the OECD to try to help them understand our procedures and lift our own experience in looking at these very complex matters, as well as signing an MOU with ASIC just recently and having a full-time ASIC officer deployed to our team to make sure that there is that linkage between the two agencies, because one of the criticisms was that we were not closely aligned off. So Greg Medcraft from ASIC and I have tried very hard to bridge those possible and potential gaps that may appear. That is a bit of a job lot of a few things, but that is what we are focused on.

Senator EDWARDS: That is very good. That is just something that we will follow. Finally, I am a winemaker from South Australia and I read in the Fin Review on 3 February that you have been tasked by the ATO to go and crack down on people that rort the tax system. Have you actually been briefed by the ATO on a number of people that they are pursuing?

Mr Negus: I have not personally, but I will hand over to my deputy, who would be dealing with that.

Mr Phelan: Not the full detail, but I am assuming that the one you are talking about is part of Project Wickenby, where they are looking at tax schemes and so on to work with us.

Mr Phelan: Neither am I, and I would have to take that on notice in relation to this particular one. But, having said that, we work very closely in the fraud and anticorruption area with the ATO, and we regularly have meetings with the ATO. They are part of the organised crime steering committees that sit around the country. For example, the head of the taxation serious noncompliance area works with the assistant commissioners for crime right across the country, from all the jurisdictions. So we are much more closely linked with the ATO than we have ever been before, and we take a very measured approach to what we do with the ATO. There are some matters that clearly fall within where the ATO should take regulatory action. There are some matters that are clearly criminal and for us—those that have organised crime links in particular. We will decide amongst ourselves which is the most appropriate course of action to take in the investigation. One size does not fit all either.

Senator EDWARDS: According to this report, it has called in the Australian Federal Police after uncovering rorts in the wine system which cost taxpayers more than $300 million a year. So you have not been briefed at all?

Mr Phelan: If the ATO are saying they have referred it to us, I am sure they have.

Senator EDWARDS: I have been subject to ATO audits, as everybody is from time to time. They are fairly thorough, and the thought that wine producers in this country are stacked up with organised crime is quite frightening.

Mr Phelan: I think I know the story you are talking about, not that I can respond in detail.

Senator EDWARDS: Yes, it appeared on 3 February and was written by Simon Evans and Edmund Tadros.

Mr Phelan: That is where I think the tax office was alleging that there were schemes where non-producing wine assets were occurring and there would be the subsequent write-offs et cetera and the claiming of all the deductions for things that were never commercial going concerns. So if there is criminality around that—in other words, it is organised—then that is a matter that we work very closely with the ATO on, to get behind it. To link just one person making fraudulent claims to an organised group is something that clearly we work with the ATO on.

Mr Negus: In the AFP we do have fairly significant thresholds, just from a resourcing perspective, so that we cannot literally chase down every ATO referral for smaller matters. Again, as the deputy said, it is more about those organised schemes where we see structured, advertised processes—

Mr Negus: Wickenby-like matters that we would then assist them with, and the tax office in their own right do actually present criminal prosecutions through the DPP to the court for more minor matters, but, where they are organised, structured or serious and complex, they would refer them to us and we would work together on them.

Senator PARRY: Surely, Senator Edwards, they will let you know—at five to five by knocking on your door when the dawn raid occurs!

Senator EDWARDS: I will be interested to hear what the ATO has to say at 7.30 actually!

CHAIR: I want to know why we haven't had a bottle of wine yet! But I think one of the feathers in the cap of the AFP over the past few years has been your involvement in Timor-Leste with the UN mission. It provides a tremendous model for other operational activities overseas. Would you like to give the committee an overview of your experience, and how you have found that and what you have learnt out of that over the last few years?

Mr Negus: I will get Deputy Drennan to talk about that, but can I just put on the record: we have just obviously pulled out of Afghanistan and South Sudan; for the seven years we were in Afghanistan, about 180 AFP officers served in Afghanistan over that period, and I want to put on the record my personal thanks to all those officers for what they did. Whilst the Australian Defence Force quite rightly received high praise for the work they did in that regard, the 180 officers from the AFP who were there for that seven-year period did a substantial amount of work, including training over 2½ thousand Afghani police in Uruzgan. Likewise, we have just pulled out of South Sudan, where we have had, from memory, 10 people—I am just trying to think of the total number of people who have served there. But there is a substantial number of people who have served there as well, in that context, and in some quite dangerous situations: just before Christmas you would have seen those attacks on the UN in South Sudan which our people were very close to, and they had to be evacuated. So I wanted to put that on the record. Now I will pass to our deputy to talk about East Timor specifically.

Mr Drennan: Our role in Timor-Leste was initially one that was very complementary to the UN presence there. The UN presence there was about stabilisation and getting the country to a point where it could start to rebuild. Parallel to that, we ran what we called the Timor-Leste police development program which was about building the basic capacity of the Timor-Leste police, the PNTL—Policia Nacional de Timor-Leste. We were able to look at the basic policing skills that they needed to form a foundation on which they could then start to build their police force. One of the main things that we did there was in regard to their police training centre which we formally handed over to the Timor-Leste government late last year—we rebuilt the whole thing. Not only did we rebuild it, we were able to establish it as an accredited training centre. So all the police training that is done now in Timor-Leste through the police training centre is accredited. It has all those learning outcomes—all the things you would expect in any country—to underpin training. So the base recruits go through there; they do their leadership training through there; they do investigations training through there. So we were able to look at all the facets of police training which are required in a police force to underpin the rule of law in a country. Parallel to that we worked with the police officers in the field to mentor and develop them and, again, particularly in their investigations area, to improve their investigations so that they can, firstly, put the matters before the court and then prosecute them through the criminal justice system. That is very complementary to other programs which have been run there, with the assistance of the Attorney-General's Department and the Department of Foreign Affairs and Trade from Australia, in developing the judiciary and prosecution systems. Again, you cannot just build a police force and not be able to then use the rest of the criminal justice system. The funding for that program runs out at the end of this financial year and it is a matter that will be subject to discussions to look at the further funding for it.

CHAIR: So that is your AFP program that funding is running out for?

Mr Drennan: Exactly, yes.

Mr Negus: It is ODA funding, overwhelmingly.

Mr Drennan: Yes, it is.

Mr Negus: Just to add to that, we have been speaking to DFAT and the foreign minister, I think is aware of the situation, to look at that.

Mr Drennan: So our assessment is that the basic fundamentals have really been done but there is still a lot more work to do there to start to build that so that the Timor-Leste police can become self-sufficient and continue to develop themselves. We still do quite a bit of work in some of those niche areas, particularly about community violence, and we have even set up some centres there which enable, predominantly, women who are subject to family violence to drop in and which provide shelters and that for them. Again, it is an area which has required some significant work, but it is a niche area where we have been able to provide that assistance. Among the areas which we do not get involved in, which is really important, is the tactical training. Again, that is a legacy from when the UN were there and the ability to get some public order there. There are police formed units which are sort of paramilitary units. They are the responsibility, really, of the Timor-Leste police and other countries to support them. Our real focus is about the community policing aspect of them and about the investigations and just to get back to that fundamental of rule of law.

The other really important aspect of what we do there is very complementary to the Millennium Development Goals—those things about good governance and about it being safe for kids to go to school or women to go to hospitals and these sort of things. So it is very complementary to what the overall aid program is in general.

Mr Negus: You heard the deputy mention the rule of law. For many years now we have been saying that without the rule of law foreign investment, economic development, stability and security are not possible. Therefore, for the countries to progress and for Australian aid dollars to be spent wisely, you need to have those underpinning rule of law issues done and have them self-sufficient. The same applies in Papua New Guinea now. We are supporting them in the Solomon Islands, where we still have 100 AFP officers working to transition to those particular countries looking after their own issues. Rule of law and human rights are fundamental to all of the things that we teach in those community policing models that these people are delivering on the ground there. We had 50 in the UN. When the UN moved out those 50 were removed but we still have around 35, I think, Deputy?

Mr Drennan: Thirty-five, yes.

Mr Negus: We have 35 people in there doing those training programs and doing the sorts of things that the deputy mentioned.

CHAIR: Do you find that part of that is a cultural change too, because of their experience through previous governments and the way previous police forces conduct themselves?

Mr Drennan: In any nation building there is an evolution. Probably a really good example is if you look at Afghanistan. The policing role in Afghanistan was really a counterinsurgency role. Over time that will need to evolve into community policing which suits the circumstances. In the Solomon Islands, again, they had very community based policing, but the governance and structures of the country broke down, so the policing fell down around that. So there is a transition that it needs to go through and it depends on what baseline you start with. One of the things they found internationally is that the sooner you can intervene with a police-led intervention and capacity building, the more effective you are. If you actually wait until it is a military led intervention then the circumstances in the country are far worse, so there is far more rebuilding to be done. With those interventions where we have gone in where they have been police led, you do not need to do as much basic rebuilding before you can start to bring it back to what the expectations would be for community policing underpinning rule of law. But we need to temper this as well with where the country is, what the pressures are on it and what the global or international environment is around it. It would be very remiss of us to say that what we have here in Australia is the model that fits everywhere. But, again, we do a lot of work on this before we go into any mission. We do a lot of research and set our objectives to what is achievable and what is practical for that particular country.

Mr Negus: For instance, in Timor Leste you have a Portuguese legal system that is not necessarily akin to anything we would recognise here. So it is trying to work in those environments and give them all of the skills and requirements to be community police officers, but put it into a Portuguese legal framework. Again, with multiple donors and multiple people developing and producing things there it is about trying to get some consistency across education, training, development, carers and those sorts of things and for the police to be properly paid so that corruption is minimised. All of those sorts of things are fundamental to what the deputy has just been talking about.

CHAIR: Language would be another issue, too?

Mr Negus: Absolutely.

Senator PARRY: At Timor Leste I visited the police training centre just before it was opened. I walked through when it was in the final stages of construction. Could I just place on record my commendation for the work the AFP have done in Timor Leste. The people I engaged with there very much appreciated the assistance. It is great nation building between us.

CHAIR: One of the topics of discussion of the public for the last few months has been the issue of drug and alcohol fuelled violence. There have been some new initiatives at a state level, but we have also been discussing the relevance of that at a national level. Could you give an outline of what, if any, involvement the AFP has had in that area with the relevant state governments?

Mr Negus: Here in the ACT we perform a community policing role. The Chief Police Officer in the ACT, Rudi Lammers, has been heavily involved in talking to the local government here about those sorts of issues and has put a range of strategies in place. We are combining particular teams and making sure we have more police out at the peak times when there is trouble around, in Civic particularly, but in other parts as well. On a national scale, I take part in the commissioner's conferences and meetings regularly, where this is number one on the state and territory police commissioners' list of concerns. I contribute where I can. I am an interested spectator in many ways—we do not have those pressures at a national level. Again, the chief police officer represents on those committees, as well, so he speaks for himself as far as the ACT is concerned.

You only have to watch the nightly news to see—although they tell me assaults are lessening over time, but it seems you see more of them on camera phones these days, and therefore they seem to be far more—

Mr Negus: And of course the tragic one-punch assaults and coward punches, as they are so called, with people dying it seems every other week from these things, are horrific for everyone involved. Alcohol without doubt is the number one concern of the state and territory police commissioners in their communities. It causes more social harm than anything else. We work with them as best we can to give advice and support. Again, we toss around a range of ideas. In the last couple of years we have all run Operation Unite—a full court press, if you like, against drunk driving and alcohol fuelled violence. We put out just about every police officer we have over particular high-intensity weekends to try to send a very strong message about the tolerance of this being zero from the police. They have been quite effective in getting communities to talk about these things, at least, but you cannot do these every weekend, unfortunately. But we try to target those to best effect as best we can.

Mr MATHESON: Talking about alcohol fuelled violence, it is a combination of a number of things: alcohol and drugs. When you talk about taskforces on the waterfront, do you think there could be a joint taskforce to expand the capacity of the dog squad—drug dogs—on suburban streets?

Mr Negus: The states and territories look after that area exclusively. I am not sure we could add a lot in that regard. We have dogs, but I think the states' expertise outweighs ours in this area. They are pretty much state and territory policing issues and state and territory government issues but we are happy to provide support if asked. But from a funding perspective it would be very difficult for us to come in in any meaningful way and support them in that environment.

CHAIR: I thank the witnesses, and particularly the commissioner, for coming today. The committee may come back to you with further questions during the course of this inquiry, as it progresses.